Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 4
From August 2011

http://boards.fool.com/morgans-other-plans-for-yongye-295123...

Morgan Stanley is rumored to have spent $1 million in due diligence before buying Yongye.

Morgan then spent $50 million to buy 5.7 million preferred convertibles. The convertibles pay 7% yearly paid in shares. The duration is 5 years. This does not look like adequate compensation for $1 million in due diligence unless Yongye is capable of convincing the market it is all it says it is and the price triples or quadruples. It has to nearly double to get them to the $8.80 they paid for the preferreds. The conversion rate is flexible and it will be impossible to know the conversion price or number of shares until it happens. All formulas for calculating the dividend distribution and the number of common shares conversion will yield are subject to variable outcomes of price per share and income targets. Suffice it to say, they will lose money if YONG continues to trade far below $8.80 at the 50 DMA of $4.64

But wait. Could they be planning something else?


For all those with a basis below $6.60--congrats

If I had been smarter i would have bought at $2.71 and more than doubled my money

If Morgan had been smarter they would have offered this premium in May 2012 and saved a couple of bucks. They do some stupid things

If you missed it this time around, I predict they will leverage it up, take it private, clean it up for a few years and then IPO it at 75 million shares and make a couple hundred million dollars instead of the 7% per year paid in nearly worthless shares. You could buy some more at the IPO
Print the post Back To Top
No. of Recommendations: 19
If I had been smarter i would have bought at $2.71 and more than doubled my money

you mean instead of making outrageous unfounded claims about Yongye management, suggesting that they were corrupt and the company was a fraud? Yes, you should have.

I would love to know how many MF members you scared out of their shares right when they presented the most value. Luckily I was not one of them.

Thanks for the valuable analysis above.
Print the post Back To Top
No. of Recommendations: 0
You're right, mekong. Not just here. Check the NFLX board. I appreciate reasoned bear arguments. They have saved me. But, some smoke is being blown up our skirts from time to time on these boards. Spot
Print the post Back To Top
No. of Recommendations: 7
Can't believe LKK is making an appearance on this board now. How funny. Too bad she wasn't actually short the stock - just doing the shorts' bidding instead.
Print the post Back To Top
No. of Recommendations: 11
Oh, and Kit Kat - when YONG has to defend itself against lawsuits claiming the offer price is too low, one of their justifications will be that short attacks have created a "China discount" that prevents those stocks from trading at or above book value (making an offer below book value "fair"). You were a big part of creating that "China discount" with your largely ill-informed attacks and conspiracy theories, so you screwed us in yet another way.

Thanks.
Print the post Back To Top
No. of Recommendations: 11
Sorry, but you guys sound like a Yahoo board. I hope everyone feels better with a loud "I told you so"

It is KK's problem if she didn't double her money, but that is her decision
It is the "others" problem if they didn't buy shares based on her posts, but that is their decision
It is YOUR problem if you can't handle reading any kind of post that disagrees with your own thought process. If this is the case then you are fools.

This stock swirls in funny business, I own a lot of shares and the rah-rah around this one in MF dom has at times been a caucaphony. You have to be blind not to see the funny business in this one, including what is going on now. That means risk, and KK's posts just point that out.
Print the post Back To Top
No. of Recommendations: 18
Certain stocks across the MF universe attract almost fanatical followings where no negative comments are tolerated. Yongye is one. FMD was another and Netflix is also in the club. American Oriental Bioengineering was a GG pick that never tolerated criticisms. If you are going to invest, you need to consider the other side /interpretation of the documents. There was never a figure made up in my coverage--it was all from their filings.

Said this over and over--I was never short. I had no agenda to get people to buy or sell. Investors here form their own conclusions. There was never a buy or sell recommendation included in the coverage.

I was appalled at Yongye's disregard for investors. They continuously wasted capex, had a constant need to raise money through dilutive share offerings and egregiously mismanaged working capital. My small presence covering them on these boards was hardly enough to move markets and direct the course of the share price down. In spite of their growth, they failed to return value to shareholders. This is one of the greatest sins a public company can commit. Being taken private is better for them and investors.

It has been discouraging and hurtful to be criticized for being short this company and using that as a basis to attack a less than positive view on their business practices. The personal attacks and condemnation and laying the blame for investors losses on my research is depressing. If I had been running this newsletter, Yongye would not have made the cut and your losses would never have occurred.
Print the post Back To Top
No. of Recommendations: 7
I tend to think that most of us that are still on this board have gains in YONG, so you're mistaken in the assumption that we all have losses (although I do feel for the folks that do). I'm not afraid to admit that the manipulative tactics that brought the share price down have a lot to do with why I had had the opportunity to make many separate purchases at low price points and got my cost basis below $4 and will profit handsomely regardless of how this plays out (hopefully with a rejection of the go private offer and several more years as a public company, however slim those chances may be).

YONG had some of the best contrarian viewpoint/devils advocate posts that received many rec's over the past few years. However, when someone publishes posts/articles with disregard for the facts and gets flamed for it, they always blame "fantatical followings that don't tolerate negative comments" and disregard all of the fact driven negative posts/articles that got praised.

I'm sorry that you feel discouraged and hurt. Please cry me a river.
Print the post Back To Top
No. of Recommendations: 15
Don't know if anyone else noticed, but Kat never did anything but publish analysis of YONG, never attacked anyone personally (at least that I saw). However, many people who were discouraged and offended that Kat would do such a thing resorted to personal attacks regarding motives and integrity which is unnecessary and uncalled for.

I don't know Kat personally, but I appreciate Kat's willingness to provide some balance to the "cheerleading" tendency that TMF stock recs tend to have and hope that Kat continues to provide such a balance.

JJ
YONG owner, with losses if bought out at $6.60
Print the post Back To Top
No. of Recommendations: 5
I think Mekong, kidchicago, myself and others are happy to see posts with a good counter arguments on the risks of YONG. Obviously, the board would have less value if everyone always posted positive comments and no one discussed the risks. For instance, kidchicago posted several times about the risk of all US listed Chinese stocks getting delisted if the PCAOB-China inspection issue was not resolved. However, the problem with LKK’s analysis was that he made assumptions (with no factual support) and then talked about them as if they were facts. It seemed he had a negative bias or spin on many aspects regardless of what the numbers showed. He stated several time that “large amounts of AR may never be collected”, but had no evidence to support that statement. Even when all the reserved for AR was collected, he still assumed there would be major AR write-offs. LKK would then also ignore other posters comments when we pointed out that he was either wrong or exaggerating based on financial data in the 10Q. I guess my biggest critique is that he never considered valuation. He made a big deal about the auto loans, potential for AR write-offs and a slowdown in the business, but even if he was right on those points (I don’t think he was), the stock was still undervalued trading at a PE of 2 to 3. Their net assets alone was enough to support the share price, so even if the business was slowing as much as he thought, the stock price was still way undervalued. Again, I think this board was very tolerant of opposing opinions. We were just not tolerant of statements repeatedly made that were factually wrong and had already been disproven. I personally don’t think LKK was trying to hurt the stock price or was working with shorts, he just seemed to have this negative bias in his analysis and posts.
Print the post Back To Top
No. of Recommendations: 2
Lekitkat,
I always appreciate your view on any company and even though my knowledge or accumen on any investment maybe at the lowest level at least you give me a chance to see all sides of the investment. I want you to give your view point. Whether it maybe negative or positive. On this company I took the long view and decided to roll the dice against your veiw point. I have made 23% so far but you have also helped me to make my decision. There are many companies that you have helped me to understand.

Thanks to all the Fools.

Andy
Print the post Back To Top
No. of Recommendations: 4
However, the problem with LKK’s analysis was that he made assumptions (with no factual support) and then talked about them as if they were facts.

I couldn't have said it better. The more that members pointed out that "certain" (not all) of KitKat's assumptions were opinions, the more he/she defensively reiterated them as facts, even when they appeared to contradict the information that was publicly available.

It was clear that KitKat had spent a considerable amount of time going through YONG's SEC filings based on some of the data/information quoted, and that is what made many of his/her statements that directly conflicted with them so puzzling to many of us. I honestly believe that KitKat is too smart to not understand what he/she was reading.
Print the post Back To Top
No. of Recommendations: 5
OK, folks. I am very disappointed by the tone of this thread. Motley Fool is supposed to be better than this.

LeKitKat is one of the sharpest posters in the MF community.

If you haven't seen her work on the Value Hounds board, you are missing out on one of the most valuable resources in all of Fooldom.

Do you see that set of icons next to her name? That big gold trophy is a Favorite Fools icon - meaning she is one of the most favorited Fools in the land. The framed trophy icons - she has been nominated by fellow Fools as the top contributor to the Motley Fool community – she actually won this honor just this last year. It's basically the MF People's Choice award for crying out loud.

And how did she receive these honors? By sharing her thinking – both when she agrees with a service's point of view and when she disagrees – and by engaging in respectful discussions with others. By not resorting to the personal attacks you have launched at her on this board when she dared to present an opinion that didn't square with your own. She deserves better. She has admitted she missed a big opportunity, but that's no reason for all of you to spike the football in her face.

Gouldberg
Print the post Back To Top
No. of Recommendations: 5
It's been pointed out in every one of these threads regarding KitKat and YONG that she's been voted a Favorite Fool in the past. I'm sure those contributions were likely stellar.

Unfortunately (in my opinion) she was unable to keep emotion and personal bias out of her writings on YONG and that led to a ton of emotion of the part of folks on this board and here we are now.

If you think she didn't know what kind of response she would get when starting this thread on this board, then you haven't been following her exchanges on YONG over the past year.
Print the post Back To Top
No. of Recommendations: 2
I don't think accusing Kat of an inability to seperate emotion from analysis is a bit hypocritical. Those who debated against Kat seemed just as unable to seperate emotion from analysis. Besides, interpreting emotion through posts on a discussion thread is difficult to say the least.

JJ
Print the post Back To Top
No. of Recommendations: 0
Sorry, editing:

I don't think accusing Kat of an inability to seperate emotion from analysis is fair, and is a bit hypocritical. Those who debated against Kat seemed just as unable to seperate emotion from analysis. Besides, interpreting emotion through posts on a discussion thread is difficult to say the least.
Print the post Back To Top